Expressing deep concern over the takeover of a string of Indian pharma companies by the MNCs and also the proposed visit of US-based PhRMA delegation to meet key Indian officials, a host of NGOs and experts working in the health sector have called for the imposition of an FDI cap of 40% in the pharma sector and for the liberal use of the compulsory license  provisions of the Indian Patents Act to secure access to patented medicines and therefore lower the costs of medicines.

In an open letter to prime minister Dr Manmohan Singh, the health interest groups and experts expressed the apprehension that the the purpose of the  Pharmaceutical Research and Manufacturers of America (PhRMA)'s visit is to discourage the Indian government from applying a cap on FDI in the pharma sector and from issuing compulsory licenses for patented medicines. A delegation of PhRMA, which represents leading US pharma companies, is to visit India from October 21, 2010 to meet with different ministries of the government of India.

“We are strongly of the opinion that an FDI cap on foreign ownership of pharma companies and liberal use of compulsory licenses are two vital
avenues open to India to find ways to ensure much wider access to essential medicines to it’s citizens. We demand that the Indian Government be firm in keeping these options available to us in the future in order to strengthen self- reliance and not succumb to pressure by US based companies and the US Government,” the letter says.

It further says that India is, today, the fourth largest producer of drugs in the world and a world class supplier of relatively cheap generic medicines. It is the largest supplier in the world of low-priced anti-retrovirals and exports medicines to over 200 countries. The pharma sector is a major foreign exchange earner, only next to the IT sector, with a turnover in excess of Rs. one billion. However, major concerns regarding access to medicines in the country remain. The WHO has reported that about 68 crore people, i.e., 65% of Indians are without access to essential medicines. Instead of building on the excellent manufacturing capacity to make available essential medicines for all, there has been progressive undermining of these gains especially in recent years.

All the three major developments which resulted into India becoming the ‘pharmacy of the world’ have now been reversed -- the Indian Patents Act of 1970; initiation of manufacture of medicines from the basic stage by Indian public sector companies in the sixties; and the 1978 Drug Policy that imposed
several restrictions on the operations of foreign companies while providing preferential treatment to Indian companies. The 1979 Drug Price Control Order (DPCO), that imposed price control over 347 medicines has also been undermined by reducing the number of medicines under price control to only 76, the letter said.

The NGOs called upon the government to scrutinise the spate of acquisition of Indian companies by MNCs and explore whether anticompetitive provisions of our Competition law are being violated and also to examine the existence of collusive behavior and abuse of monopoly through intellectual property rights and resultant high prices of patented drugs in India.

The NGOs and experts also called upon the government to scrap the loan license system and contract manufacturing to discourage big companies from reducing their manufacturing activity and formulate appropriate policies to incentivise bulk drug manufacture by Indian companies over import of bulk drugs. It also asked the government to resist attempts to introduce measures such as data exclusivity, or to dilute/remove Section 3d of the Indian Patents Act, especially through bilateral/multilateral FTAs.

The signatories to the letter included expert like Dr Amit Sengupta, Dr Mira Shiva, Dr Gopal Dabade, Loon Gangte, Amitava Guha, Dr B Ekbal, Prabir Purkayastha, S Srinivasan, Leena Menghaney, Dr C M Gulhati and K M  Gopakumar.